JM Financial has started coverage on Adani Power with a Buy recommendation and a target price of Rs 178, suggesting about a 22% upside from today’s price.
Why the Buy Rating?
- Strong execution track record and leadership in India’s thermal power sector.
- Growing demand for reliable base‑load power as renewable sources expand.
- Strategic moves such as fast‑tracking the 4,620 MW Mundra project and pre‑ordering key equipment.
Capacity Expansion Plans
Adani Power currently runs 18.1 GW of thermal capacity. The company aims to reach 41.9 GW by FY32, combining:
- 10.8 GW of organic growth (new plants built by the company).
- 7.3 GW of inorganic growth (acquisitions and joint ventures).
This aggressive build‑out positions the firm as the largest private‑sector thermal power producer in India.
Financial Outlook
- EBITDA per MW expected to rise from Rs 13 million in FY25 to Rs 18 million by FY32.
- Revenue and EBITDA CAGR of roughly 15% and 18% respectively during FY25‑FY28.
- Net debt/EBITDA will climb to about 3.0× by FY29 due to Rs 2 trillion of cap‑ex, then ease back to 1.6× by FY31 as new capacity comes online.
- High plant load factor (71%) and plant availability factor (91%) support strong earnings.
What This Means for Investors
The firm’s focus on expanding thermal capacity gives it a clear edge in meeting India’s projected peak demand of over 700 GW by 2047. With coal‑based generation expected to reach 340 GW, Adani Power’s early positioning could translate into steady cash flow and earnings growth for shareholders.
Remember, this is perspective, not prediction. Do your own research before making any investment decisions.